Existing-Home Sales Surge in November: A Comprehensive Analysis

The real estate market witnessed a significant uptick in November, with existing-home sales climbing 4.8% to a seasonally adjusted annual rate of 4.15 million units. This marks the fastest sales pace since March 2024 and the most substantial year-over-year growth since June 2021. Let’s delve into the key factors, regional dynamics, and broader implications of this surge in housing activity.

Key Market Highlights

• Sales Growth: Existing-home sales rose by 4.8% compared to October, marking a notable 6.1% year-over-year increase.

• Median Prices: The median price for existing homes increased 4.7% to $406,100, the 17th consecutive month of price appreciation.

• Inventory Levels: Unsold inventory dropped 2.9% month-over-month to 1.33 million units, equating to a 3.8-month supply at the current sales pace.

Expert Insight:

Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), attributes this momentum to increased job growth, adjusted consumer expectations around mortgage rates (now stabilizing between 6% and 7%), and the rise in housing inventory compared to last year.

Regional Performance

Northeast

• Sales Growth: +8.5% from October, +6.3% year-over-year.

• Median Price: $475,500 (+9.9% YoY).

Midwest

• Sales Growth: +5.3% month-over-month, +5.3% YoY.

• Median Price: $302,000 (+7.3% YoY).

South

• Sales Growth: +5.6% from October, +3.3% YoY.

• Median Price: $361,300 (+2.8% YoY).

West

• Sales Growth: Unchanged month-over-month, +14.9% YoY.

• Median Price: $628,200 (+4.0% YoY).

Each region reflects unique trends, with the West leading in annual growth despite a plateau in monthly sales, while the Northeast saw the sharpest monthly jump.

Market Dynamics and Consumer Trends

Housing Inventory:

While inventory levels dropped 2.9% from October, they’re up 17.7% year-over-year. The current 3.8-month supply signals a shift towards a more balanced market, albeit still leaning in favor of sellers.

Buyer Composition:

• First-Time Buyers: Accounted for 30% of sales, up from 27% in October but slightly below November 2023 levels (31%).

• Cash Transactions: Represented 25% of purchases, reflecting a decline from 27% in October and November 2023.

• Investor Activity: Dropped to 13%, indicating a cooling in speculative purchases.

Mortgage Rates:

Freddie Mac reports the average 30-year fixed mortgage rate at 6.6%, down from 6.69% a week earlier and 6.95% a year ago. This slight dip has likely encouraged more buyers to enter the market.

Single-Family vs. Condo/Co-op Sales

• Single-Family Homes: Sales rose 5.0% to an annual rate of 3.76 million, with median prices increasing 4.8% to $410,900.

• Condo/Co-Op Units: Sales edged up 2.6% to 390,000 units, though they remain 4.9% below last year’s levels. Median prices for condos rose 2.8% to $359,800.

These figures underline the continued dominance of single-family homes in the market, though condos remain a viable option for urban buyers seeking affordability.

Economic Implications

Housing Equity:

Existing homeowners are leveraging an impressive $15 trillion increase in home equity over the past four years to transition to homes better aligned with their needs.

Market Stabilization:

As mortgage rates settle and inventory levels rise, the market is gradually shifting from the frenzied activity seen in previous years to a more sustainable pace.

Insights

What is driving the year-over-year price increases?

Limited inventory, sustained demand, and increased home equity are key factors contributing to rising prices.

How do regional trends affect the national market?

Each region’s unique dynamics—such as job growth in the South or affordability challenges in the West—feed into the broader market’s performance, creating a mosaic of trends.

What role do first-time buyers play in today’s market?

First-time buyers remain a critical demographic, though affordability challenges have reduced their share to record lows, as noted in NAR’s 2024 Profile of Home Buyers and Sellers.

Are cash sales declining due to higher home prices?

Partially, yes. As prices rise, fewer buyers can afford cash purchases, and investor activity has also cooled.

Conclusion

November’s existing-home sales data underscores a market in transition. While sales and prices continue to rise, shifts in inventory levels and buyer demographics signal evolving dynamics. Whether you’re a prospective buyer, seller, or industry professional, staying informed about these trends is crucial for navigating the real estate landscape effectively.